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Monday, 30 November 2009

Lease Or Buy?

The decisions that business owners have to make are hard. Why do they choose to purchase equipment? How do they decide to lease equipment? What kinds of economic issues do they take into consideration? The article is going to discuss how leasing might benefit your company or how you might want to just purchase equipment outright.

Obviously the steps in making a decision to purchase equipment are a factor that you have to consider. Is your equipment old and not cutting it for your client's demands? The first option a business owner has is to purchase the equipment from capital saved up. The benefits of doing so are you don't have to worry about payments on a monthly basis. Most company owners are feed up with the lease or loan process. Purchasing equipment outright limits paperwork that can delay much needed time on the piece of equipment. Also the calculation that a business owner does before purchasing the equipment tell them to buy with cash because of the return expected with signing of a new client. The price of the equipment is low and affordable to pay out of pocket. Obviously there are many more reasons to purchase equipment outright that are not mentioned.

Leasing? Why should I pay that interest rate when I can pay for the equipment? That is the question most business owners will ask themselves. Leasing of equipment provides your company a tax shelter that limits your exposure at the end of the year to the government. Leasing also provides your business with low monthly payments that makes any piece of equipment affordable for small or big business. Also provides businesses with the opportunity to have the equipment pay for it self. The options your company will have with leasing are limitless.

Once again we have two choices that a business owner can make for his business. We can talk about what kinds of equipment are prone to be the best option for leasing and what kinds of equipment are not. The saying that most leasing professionals will follow is "if it depreciates lease it, if it appreciates buy it". Due to the economic condition of this country hinders business owners from seeking financial assistants. We can make all the excuses in the world about both options discussed in this article. They both provide there pros and cons for business owners. All we know is that statistics show that more company's lease then purchase equipment.